3/07/2014

Korea's Free Trade Agreement with Canada: Will it Pass?

Korea is near to inking an FTA with Canada.  This agreement will be the first FTA for Canada with an Asia-Pacific nation.  The major hurdle, for Canada, in execution of this agreement is opposition from labor unions and the auto industry.

The Canadian auto industry is, particularly, concerned with the numerous non-trade barriers in Korea.  Increasingly, American automobile industry has been vigorously fighting Korea to drop regulations that seem to, only, benefit the local car manufacturers to the detriment of importers.  The Canadian auto industry is fighting the deal with U.S. stats. 

The CEO of Ford Canada was quoted by the The Star as saying that: "the challenge with South Korea - we've been very strong in our opposition to it - is it's not going to be a fair deal.... It is a closed market. We're very fearful of what this means to Canada. There's no upside, only downside . . . We want fair trade."  This sentiment is echoed by many in the West.

However, many industries will benefit from this deal.  The largest industries that we believe will benefit from this deal are food processors, basic material companies, and agricultural companies.  We suspect a boom in business in these sectors. 

We suspect the deal will pass and, thus, those in industries that suspect a benefit from the 50 million head Korean market should consider exploring the market now - get the jump on your competition.

_______
 Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He has, recently, been ranked as one of only two non-Korean attorneys as a Top Attorney working in Korea by AsiaLaw.